The ‘No Need’ Objection

As outlined last month, “So Here’s the Deal” is designed to help you help more customers. Well, F&I and Showroom wants to help even more, and has agreed to reward the F&I pro whose question I address on this page with a free pass to Industry Summit 2015. And our first winner is Chance of Paducah, Ky., home of the Purple Toad Winery. In his video, he states the following:

“I work for a dealership that sells a car brand that is highly rated on Consumer Reports, Kelly Blue Book — all those places. Even after talking about the technology, the changes in auto manufacturing and the components on the car in the last several years, I’m still having a tough time getting customers to see the value of a service contract. What would your advice be to get those customers to see that even though that car is a wonderful brand, there is still value in that service contract?”

Chance, you’re off to a great start. Educating buyers about all the items you mentioned is critical. But the key to helping a customer see value in any F&I product is needs discovery. It is the foundation upon which you build your presentation. When a customer feels they don’t need the service contract, if you can’t tell them why they do, you’re done.

Let’s assume a primary reason the customer is buying this brand of vehicle is because it has an excellent reputation, as you mentioned — either because it is highly rated or the customer has personally owned one or more in the past without issue. Rather than make the vehicle the initial focus of your presentation, begin your discussion as to why they need a service contract by linking the protection to something you learned about them earlier. In other words, focus your service-contract discussion on their ownership and driving habits.

For example, maybe they keep their vehicles long after the manufacturer’s warranty expires, or maybe they expect to put a lot of miles on it. Whatever the case, try starting with something like this:

F&I manager: I understand. That’s why you’re buying the same brand, because it’s one of the best brands available and you don’t expect any problems. That’s why I drive one. Although I do find it surprising you’re not interested in extending your basic coverage, based on what you told me earlier.

Customer: What did I tell you earlier?

F&I manager: You said it’s been five years since you bought the last one.

Customer: So?

F&I manager: Obviously, you tend to keep your vehicles far in excess of the manufacturer’s warranty. And unfortunately, if this one breaks, we can’t fix it.

Customer: What do you mean you can’t fix it?

F&I manager: Our technicians have become component-replacement experts. If a computer chip or resistor fails in your ECM, they can’t replace the chip. They have to replace the entire engine control module. If your gas gauge quits working, you can’t buy a gas gauge. You have to replace the instrument cluster. The same is true if a faulty switch limits the air conditioner to one speed. That’s why, especially on the 2015 model, a service contract is absolutely critical. It’s not that you have a lot of repairs, it’s that when you do, it’s a lot more expensive to fix. And you plan on keeping this one at least four or five years, right?

Customer: Right.

That positive response means you’ve earned the right to go for the close. While this is probably not much different than what you’re already saying, the key is to begin your product conversation with information specific to the customer.

Our next question comes from Selena in Lexington, Ky., home of Jif peanut butter. In her video, she says, “Our store does a lot of leasing. We have many customers trading out of their lease early while leaving their payment the same. My problem is GAP is included in every one of our leases and not everyone is seeing the value of our tire-and-wheel products. What can I do to get my products per lease up?”

You can find my response to Selena’s question at www.fi-magazine.com. Don’t forget to submit your video question for a chance to win a free pass to Industry Summit. Congratulations to our first winner, Chance. Until next month, remember: It’s a beautiful day to help a customer!

Ronald J. Reahard is president of Reahard & Associates Inc., an F&I training company providing F&I classes, workshops, in-dealership and online training. To get his advice, use your mobile phone to record a video of you posing your question and upload it to www.hightail.com/u/REAHARD. The notify Ron by emailing him at [email protected].